This case studies illustrates how, since the implementation of GSD, Epyllion achieved transparency of their true cost of production. As a consequence the company are now able to make business-critical decisions using fact-based data. Additionally they have been able to introduce dependable production objectives for their team and improved their KPIs for SMVs and efficiency. GSD implementation also has a positive impact upon product quality and capacity planning and forecasting.
THE CHALLENGE – TO GAIN VISIBILITY OF THEIR TRUE COST OF PRODUCTION
Prior to the installation of GSD in 2014, time, cost and capacity calculations at Epyllion were based upon historical time study data created in their own productions units.
Epyllion acknowledged this data was subjective and outdated. Therefore it was unreliable, with no indication of their real cost of their manufacturing. As a result the company lacked visibility of, and confidence in the true cost of production. Consequently they were also unable to establish meaningful and realistic production targets for their sewing workers.
This lack of transparency had a negative impact on the business. For example it caused lost revenue by inadvertent under-costing of orders and an adverse impact on lead times. Additionally it was difficult to achieve agreed delivery targets without extra time and unplanned and costly overtime.
Shajedur Rahman, Epyllion’s COO explained;
“The need to accurately and objectively quantify the actual standard time of each element of our garment making process was a key requirement for us.”
Once accurate and reliable SMVs were in place, Epyllion could accurately identify the true cost of production of their operation. As a result the company could make more informed key business decisions using reliable fact-based data. An additional focus was to optimize and standardize their manufacturing processes to further improve their product quality and production efficiency.
“We chose GSD as a partner as they are recognised as the global standard for time and cost in the apparel industry.
We were confident that their experience and proven solution would provide a strong foundation for our company to optimise costs and improve our productivity”
Shajedur Rahman (Mithu) – COO – Epyllion Group
THE OBJECTIVE AND SOLUTION TO SHOW THE TRUE COST OF PRODUCTION
The key objective was to establish the common language of GSD as the dependable unit of measure for time and cost within their business. Additionally they aimed to establish the true cost of their production. Subsequently GSD was the catalyst for driving improved cost and production efficiency.
During the important training and implementation stage, the operational team acquired a thorough understanding of GSD. For instance the training included extensive practical sessions on the shop floor. They were able to create accurate cost benchmarks of their current production. For this reason this gave the company a crucial awareness of potential excess motions in the methods. As a result non-value-added activities were eliminated.
Epyllion now has the tools to set meaningful production targets based on fact-based capacity data. Additionally the lost business opportunities, previously caused by over costing or under-costing of orders, were eliminated.
They are also able to understand their true cost of production per style. Consequently the company were able to make more informed commercial decisions.
The evaluation of the new method standards using GSD resulted in a standard minute values reduction of 5% on average.
|Significant Increase in Efficiency via Method Improvement
Post implementation, Epyllion saw efficiency rise from 59% to 72%, representing an increase of 22%. Optimization of the sewing operation methods and reducing unnecessary handling motions achieved this significant increase.
|Improved Costing Process
Their original costing process, was based on experience and historical subjective data. Now replaced by accurate, scientific based costing using SMVs to show the true cost of production For this reason they have improved margin performance and better commercial decision-making as their key data is much more reliable and consistent. This can now see their true cost of production.
|Standardized Operations & Quality Improvement
GSD implementation optimized and standardized the production motions and methods across the operation. Subsequently enabling the company to drive significant production efficiency and enhanced quality improvements.
|Improved Capacity Planning & Forecasting
Epyllion have now developed an extensive GSD database library for all their core styles. This has significantly assists their accuracy in capacity planning & forward forecasting.
Epyllion Group started its journey back in 1994 as a readymade garments manufacturer and exporter of knit apparel. They are now one of the biggest conglomerates in Bangladesh. They have a diverse portfolio covering knitted garments, textiles, wet processing & garment accessories.
It also has an advanced, vertically integrated garment manufacturing facility, which offers a one stop service to its customers. The business works with a number of prestigious brands around the world including C&A, M&S, H&M, S.Oliver and Target.
The garment division of Epyllion Group includes Epyllion Knitwear Limited and Epyllion Style Limited. Together they produce 3.8 million garments per month. The company’s Corporate Office is located in Dhaka, Bangladesh. www.epylliongroup.com